Securities Law & Instruments

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulation made under the Business Corporations Act, Ont. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF R.R.O. 1990, REGULATION 289/00, AS AMENDED (the "Regulation") MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO), R.S.O. 1990, c. B.16, AS AMENDED (the "OBCA") AND IN THE MATTER OF PREMIER ROYALTY INC.

CONSENT (Subsection 4(b) of the Regulation)

UPON the application of Premier Royalty Inc. (the "Applicant") to the Ontario Securities Commission (the "Commission") requesting the consent from the Commission, pursuant to subsection 4(b) of the Regulation, for the Applicant to continue in another jurisdiction pursuant to Section 181 of the OBCA (the "Continuance");

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Applicant representing to the Commission that:

1. The Applicant intends to apply to the Director under the OBCA pursuant to Section 181 of the OBCA for authorization to continue under the Business Corporations Act (British Columbia) (the "BCBCA").

2. The Applicant was incorporated as an Ontario corporation on May 10, 2007, was amalgamated with Premier Royalty Corporation on July 1, 2013, and continues to exist under the OBCA.

3. The head office of the Applicant is located at #1400 -- 400 Burrard Street, Vancouver, BC V6C 3A6.

4. The financial year end of the Applicant is December 31.

5. The authorized share capital of the Applicant comprises an unlimited number of common shares (the "Premier Shares").

6. Until October 4, 2013, the Premier Shares were held by the public and were listed on the Toronto Stock Exchange.

7. On October 4, 2013, Sandstorm Gold Ltd. ("Sandstorm") acquired all of the issued and outstanding Premier Shares that it did not already hold pursuant to a plan of arrangement under the OBCA (the "Plan of Arrangement"). Sandstorm is a reporting issuer in Ontario and its common shares (the "Sandstorm Shares") are listed on the Toronto Stock Exchange.

8. In addition to the outstanding Premier Shares, at the time of the Plan of Arrangement, the Applicant had issued and outstanding options to purchase Premier Shares, and 8 classes of warrants to purchase Premier Shares (collectively, the "Convertible Premier Securities").

9. The Convertible Premier Securities were not replaced with Sandstorm securities in the Plan of Arrangement. However, as a result of the completion of the Plan of Arrangement and the terms of the Convertible Premier Securities, upon exercise, the Convertible Premier Securities now entitle the holder thereof to receive, and the holder will be issued, Sandstorm Shares.

10. Due to the number of holders of the Convertible Premier Securities that remained outstanding following completion of the Plan of Arrangement, the Applicant could not at that time apply to cease to be a reporting issuer in Ontario or in any other jurisdiction. At the date hereof, the Applicant is still unable to do so.

11. On November 8, 2013, the Applicant obtained relief (the "Exemptive Relief") from certain continuous disclosure, certification and related provisions of securities legislation on conditions, including that Sandstorm is the beneficial owner of all voting securities of the Applicant and that Sandstorm is a reporting issuer in a jurisdiction of Canada. The Applicant is currently relying on the Exemptive Relief.

12. The Applicant is currently an "offering corporation" under the OBCA and is a reporting issuer under the Securities Act (Ontario), R.S.O. 1990, c. S.5, as amended (the "Securities Act"), and the securities legislation of British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.

13. Pursuant to Subsection 4(b) of the Regulation, an application for authorization to continue in another jurisdiction under Section 181 of the OBCA must, in the case of an "offering corporation" under the OBCA be accompanied by a consent from the Commission.

14. As at January 30, 2015, there were 78,527,236 Premier Shares issued and outstanding, all registered in the name of Sandstorm. In addition, as at January 30, 2015, the following Convertible Premier Securities were outstanding:

a. Options: 2,873,333 options to purchase Premier Shares (pursuant to which up to 416,633 Sandstorm Shares could be delivered as a result of the Plan of Arrangement), with expiry dates ranging from December 11, 2017 to March 1, 2018.

b. December 2016 Warrants: 4,788,712 warrants to purchase Premier Shares (pursuant to which up to 694,363 Sandstorm Shares could be delivered as a result of the Plan of Arrangement) at an exercise price of $2.00 per Premier Share (representing approximately $13.79 per Sandstorm Share), on or prior to December 4, 2016.

c. Class II December 2016 Warrants: 8,691,004 warrants (of which 5,508,176 warrants are held by Sandstorm) to purchase Premier Shares (pursuant to which only up to 461,510 Sandstorm Shares could be delivered as a result of the Plan of Arrangement because the 5,508,176 warrants held by Sandstorm will likely not be exercised) at an exercise price of $2.00 per Premier Share (representing approximately $13.79 per Sandstorm Share), on or prior to December 4, 2016.

d. Yamana Warrants: 500,000 warrants to purchase Premier Shares (pursuant to which up to 72,500 Sandstorm Shares could be delivered as a result of the Plan of Arrangement) at an exercise price of $2.50 per Premier Share (representing approximately $17.24 per Sandstorm Share), on or prior to February 28, 2016.

15. None of the Convertible Premier Securities are listed on a stock exchange.

16. In accordance with the OBCA and the Applicant's constating documents, a special resolution of shareholders must be obtained in connection with the proposed Continuance, meaning the approval of not less than two-thirds of the aggregate votes cast by the shareholders present in person or represented by proxy at a meeting of shareholders. The only shareholder that is entitled to vote is Sandstorm, and as such, no meeting need be held. A written resolution of the sole shareholder approving the Continuance was signed as of January 29, 2015.

17. The Continuance is proposed to be made in order to enable the Applicant to be amalgamated with Sandstorm, which is organized under the BCBCA, as part of a tax-related restructuring being effected by Sandstorm.

18. The Applicant is not in default of any of the provisions of the OBCA, the Securities Act and the securities legislation of all other jurisdictions in which it is a reporting issuer, and the regulations and rules made thereunder (collectively, the "Legislation").

19. The Applicant is not a party to any proceeding or, to the best of its information, knowledge and belief, any pending proceeding under the Legislation.

20. Following the Continuance, the Applicant will remain a reporting issuer in Ontario and in each of the other jurisdictions where it is currently a reporting issuer in accordance with the terms of the Exemptive Relief.

21. The Exemptive Relief will cease to be relevant upon completion of the amalgamation of the Applicant with Sandstorm.

22. The principal regulator of Sandstorm upon completion of the amalgamation of the Applicant with Sandstorm will be the British Columbia Securities Commission.

23. The material rights, duties and obligations of a corporation governed by the BCBCA are substantially similar to those of a corporation governed by the OBCA.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

THE COMMISSION HEREBY CONSENTS to the continuance of the Applicant as a corporation under the BCBCA.

DATED at Toronto, Ontario on this 13th day of February, 2015.

"James Turner"
Ontario Securities Commission
 
"Judith N. Robertson"
Ontario Securities Commission